The IIM-Ahmedabad has urged the intervention of the Union HRD Ministry after the revenue department asked it to pay Rs 52 crore as service tax.
The Indian Institute of Management-Ahmedabad (IIM-A) has urged the intervention of the Union HRD Ministry after the revenue department asked it to pay Rs 52 crore as service tax. The institute had written a letter to the ministry earlier this year drawing its attention on Principal Commissioner of Central GST (Ahmedabad South) raising service tax on the fee charged by the Institute for four postgraduate courses.
The Revenue department, under Ministry of Finance, had considered two-year post-graduate programme (PGP), post-graduate programme in food and agri-business management (PGP-FABM), equal to a PhD degree, and the one-year post-graduation in management for executives (PGPX) as taxable courses from 2009-10. It asked the institute to pay Rs 52 crore tax, for 2009-10 and 2014-15, on the fee received for above-said courses.
“We have made a request to the HRD Ministry on the matter and the matter is being pursued. IIM-A has appealed to the Tribunal on February 13, 2018,” Deepak Bhatt, manager, communications, at IIM-A was quoted as saying by Indian Express. As the department has treated the premiere institute as a “commercial coaching centre” to raise taxes, the IIM-A, in its letter sent to the ministry, said that it is an educational institute and has been covered under categories exempted from paying service tax.
To make its point, the institute quoted a Finance Ministry notification dated March 1, 2016, that exempts two-year full-time PGP, the fellow programme in management and the five-year integrated programme in management, offered by all IIMs, from being considered as chargeable to service tax. “As the Principal Commissioner of Central GST has passed an order, the institute has no option but to appeal to the Tribunal by paying Rs 4.01 crore as per deposit fee, 7.5% of the service tax demand of Rs 52 crore, which will block the fund and strain the resources of the institute,” the four-page letter said.
“Given this background, I am writing to request you for your kind support and intervention in this matter. Through your good office, we request that our case be represented with the Ministry of Finance to revoke the order passed by the Revenue Authorities,” the letter, written by director Errol D’Souza, added.